House Passes Chips Funding Legislation 222-210

The House passed semiconductor-funding legislation 222-210 on a largely party-line vote Friday. Commerce Secretary Gina Raimondo and lawmakers are looking ahead to conference talks to combine elements of the newly House-passed America Creating Opportunities for Manufacturing, Pre-Eminence in Technology and Economic Strength Act (HR-4521) and Senate-passed U.S. Innovation and Competition Act (S-1260) (see 2202010001).

Rep. Adam Kinzinger of Illinois was the only Republican to back the measure. Stephanie Murphy of Florida was the only Democrat against it. HR-4521 and S-1260 include $52 billion in subsidies to encourage U.S.-based semiconductor manufacturing (see 2201260062), but differ in other areas.

Raimondo asked Congress to “move quickly, immediately, now, to start negotiations and work out the differences between” the bills, “focus on areas of common agreement, find the landing zone” and get a final version to President Joe Biden for his signature. Biden encouraged House and Senate leaders to “quickly” come together “to find a path forward and [put] a bill on my desk as soon as possible.” HR-4521 “was built on numerous bipartisan elements and on shared bipartisan agreement on the need to act,” he said.

“Delay is the biggest enemy we have right now,” Raimondo said during a news conference. “My message to everyone is to find common ground quickly," she said. "This should take weeks, not months.” The Senate passed S-1260 in June (see 2106080074). “Our red line is delay, inaction and foot-dragging,” she said. Senate Commerce Committee leaders hope to use informal conference talks to speed the process (see 2202010083).

Senate Majority Leader Chuck Schumer, D-N.Y., said he looks forward to a “bicameral conference process that builds on the broad bipartisan support” of the Senate-passed bill. House Commerce Committee ranking member Cathy McMorris Rodgers, R-Wash., dubbed the House bill the “America Concedes Act.” She spoke on the floor against “burdensome permitting, licensing, and regulatory regimes” that she said will set the U.S. back when competing with China.

Dozen Amendments Clear

Lawmakers approved more than a dozen tech and telecom-focused amendments to HR-4521 (see 2201310073). Many were part of an en-bloc package the House approved 221-211, including some to make changes to the chips language.

One from Rep. Darren Soto, D-Fla., proposes making nonprofits eligible for the semiconductor money. Alexandria Ocasio-Cortez, D-N.Y., seeks to ban recipients from using the money on stock buybacks or paying dividends. Bobby Rush, D-Ill., wants to require companies with more than 100 employees that apply for the semiconductor funding to give the Commerce Department data on their workforce's racial diversity.

Suzan DelBene, D-Wash., successfully sought GAO review of how semiconductor projects support U.S. critical infrastructure industries. Brad Schneider, D-Ill., wants a GAO report on the impact of the global semiconductor supply shortage on U.S. manufacturing. The Rules Committee allowed floor consideration of a proposal from Scott Perry, R-Pa. to strike a prevailing wage requirement for semiconductor facilities projects funded by HR-4521, but the chamber didn’t vote on it.

Only a few proposed amendments aimed at curbing Chinese telecom and tech entities cleared the House. One from Rep. Elaine Luria, D-Va., would bar American Rescue Plan Act funding recipients from using the money to buy equipment from Chinese gear makers ZTE and Huawei. A proposal from Lance Gooden, R-Texas, to require a congressional report about Chinese companies providing cloud computing and associated data privacy risks, failed 204-225 as part of an en bloc package.

Two telecom-focused amendments made it into HR-4521 en bloc. Rep. Steven Horsford, D-Nev., wants to expand the focus on rural areas, in a proposal drawn from S-1260 to allocate $100 million to historically Black, tribal and minority-serving colleges and universities to develop telecom sector job training. Anna Eshoo, D-Calif., wants a GAO study of how the federal government can leverage its buying power to alleviate telecom supply chain issues.

House Armed Services Cyber Subcommittee Chairman Jim Langevin, D-R.I., and Rep. Mike Gallagher, R-Wis., successfully attached language to require the Department of Homeland Security to designate four “critical technology security centers” to evaluate and test “security of technologies essential to national critical functions.” The House cleared the amendment 262-168 as part of an en bloc package. Eshoo and others added the Improving Cybersecurity of Small Businesses, Nonprofits, and Local Governments Act (HR-6541) to require the Cybersecurity and Infrastructure Security Agency to publish an annual report on promoting cyber improvements for small business, nonprofits and local governments. Commerce and the Small Business Administration would provide information about cyber barriers for smaller entities.

Tech Hub Program

Rep. Mary Gay Scanlon, D-Pa., wants to require the regional tech hub program to focus on “localities that are not the top five leading technology centers.” Scott Fitzgerald, R-Wis., and Greg Stanton, D-Ariz., added the Foreign Merger Subsidy Disclosure Act (HR-5639) to require the FTC and DOJ to consider foreign government subsidies in premerger notification reviews. The House agreed to add language from Rep. Ayanna Pressley, D-Mass., to require the National Institute of Standards and Technology to create an office to study bias in the use of AI systems and publish guidance to reduce disparate impacts on historically marginalized communities.

The House version’s $45 billion loan and grant program would support supply chain resilience and manufacturing equipment, said House Commerce Committee Chairman Frank Pallone, D-N.J. McMorris Rodgers called it a slush fund that will benefit Democrats’ political allies. Pallone spoke in support of $1.5 billion for a Public Wireless Supply Chain Innovation Fund for “innovative technologies in the U.S. mobile broadband market.” The bill would ensure the U.S. “can out compete the rest of the world by ending our reliance on other nations for the manufacturing of critical goods,” he said.

Senate Commerce Committee Chair Maria Cantwell, D-Wash., noted her panel approved 130 amendments in the Senate-passed bill and hopes House colleagues will join a “bipartisan effort” to get a final bill to Biden. Hopefully, conference will deliver a final bill that reflects Senate efforts, which would mean more likelihood of House Republican support, said lead Senate sponsor Todd Young, R-Ind. “The Senate-passed bill focuses on directly confronting China, and getting legislation like USICA across the finish line will ensure the United States leads the world into the future.” The bill includes “transformative support” for the National Science Foundation, the Department of Energy’s Office of Science and the National Institute of Standards and Technology, said House Science Committee Chairwoman Eddie Bernice Johnson, D-Texas.

House passage of the chips-funding legislation "is a significant step toward strengthening America’s leadership in semiconductors, which are foundational to our economy, national security, and global leadership,” said Semiconductor Industry Association CEO John Neuffer. “We urge leaders in the House and Senate to work together promptly on a bipartisan, bicameral competitiveness bill" containing the Chips Act funding "that can be passed by both chambers and signed into law by the president," he said.

HR-4521 is “one of the largest federal investments in innovation and workforce development in” U.S. history, said TechNet CEO Linda Moore. The bill’s regional tech hubs “will create new, good-paying jobs across America” and “strengthen supply chains.” The Information Technology Industry Council applauded passage. Its “investments in domestic semiconductor production will create a more resilient supply chain in the long-term,” said CEO Jason Oxman.

Dish Network credited House leadership for including the Public Wireless Supply Chain Innovation Fund. “These grants for the promotion and deployment of Open RAN will improve American wireless connectivity by expanding access to enhanced, secure mobile networks while re-establishing our nation as a clear leader in global 5G readiness,” said Jeff Blum, executive vice president-external and legislative affairs.